Best interest bearing savings account?

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krafty81
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Location: San Diego, CA

Best interest bearing savings account?

Post by krafty81 » Sun May 12, 2019 4:58 pm

Any thoughts? Probably Ally Bank?

lakpr
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Re: Best interest bearing savings account?

Post by lakpr » Sun May 12, 2019 5:13 pm

If this is funds you do not need in a short time, I'd suggest Vanguard Treasury Money Market fund (VUSXX), it's yield is state tax free. Its SEC yield is 2.34%, better than Ally Bank's 2.20% savings account rate, and as I said, no state tax will tip the balance in VUSXX favor. If for example you are in 24% federal and 6% state brackets, your VUSXX yield is really like 2.55%

Steep initial contribution though, $50K.

If you don't have $50K, then consider Vanguard Prime Money Market fund (VMMXX), only $3K minimum, SEC yield = 2.43%, but subject to both Federal and State taxes.

If you must choose a bank and not money market fund (for the theoretical FDIC protection), yes Ally's 2.20% savings account is one of the best.

SpaghettiMonster
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Re: Best interest bearing savings account?

Post by SpaghettiMonster » Sun May 12, 2019 5:18 pm

I use Ally, Pure Point, and Synchrony Bank. They tend to leapfrog each other frequently, but Pure Point more frequently has the better rate.

SpaghettiMonster
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Re: Best interest bearing savings account?

Post by SpaghettiMonster » Sun May 12, 2019 5:23 pm

And I keep the money I will least likely touch in no-penalty CDs at Ally and Pure Point.

Explorer
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Re: Best interest bearing savings account?

Post by Explorer » Sun May 12, 2019 5:23 pm

lakpr wrote:
Sun May 12, 2019 5:13 pm
If this is funds you do not need in a short time, I'd suggest Vanguard Treasury Money Market fund (VUSXX), it's yield is state tax free.
lakpr - are you certain this fund distributions are state tax free? I am not sure... Vanguard website does not indicate that. I personally think you end up paying federal and state taxes.

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welderwannabe
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Re: Best interest bearing savings account?

Post by welderwannabe » Sun May 12, 2019 5:27 pm

Explorer wrote:
Sun May 12, 2019 5:23 pm
lakpr wrote:
Sun May 12, 2019 5:13 pm
If this is funds you do not need in a short time, I'd suggest Vanguard Treasury Money Market fund (VUSXX), it's yield is state tax free.
lakpr - are you certain this fund distributions are state tax free? I am not sure... Vanguard website does not indicate that. I personally think you end up paying federal and state taxes.
Yes, lakpr is sure and so am I. VUSXX invests 100% into direct obligations of the Federal Govt. 100% state tax free in all 50 states.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

lakpr
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Re: Best interest bearing savings account?

Post by lakpr » Sun May 12, 2019 5:31 pm

welderwannabe wrote:
Sun May 12, 2019 5:27 pm
Explorer wrote:
Sun May 12, 2019 5:23 pm
lakpr wrote:
Sun May 12, 2019 5:13 pm
If this is funds you do not need in a short time, I'd suggest Vanguard Treasury Money Market fund (VUSXX), it's yield is state tax free.
lakpr - are you certain this fund distributions are state tax free? I am not sure... Vanguard website does not indicate that. I personally think you end up paying federal and state taxes.
Yes, lakpr is sure and so am I. VUSXX invests 100% into direct obligations of the Federal Govt. 100% state tax free in all 50 states.
Thank you :) welderwannabe ...
+1

protagonist
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Re: Best interest bearing savings account?

Post by protagonist » Sun May 12, 2019 5:47 pm

Consider that 0.1% of $10K is only $10/year.

So unless you have huge amounts you are putting in a savings account, a few tenths of a percent annual interest probably will not make a huge difference regarding your future wealth. I use FZDXX (Fidelity) because it is convenient for me, but there is a large initial investment required ($100K if my memory serves me well, though you don't have to maintain it).

cerequio
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Re: Best interest bearing savings account?

Post by cerequio » Sun May 12, 2019 6:13 pm

krafty81 wrote:
Sun May 12, 2019 4:58 pm
Any thoughts? Probably Ally Bank?
Goldman Marcus is 2.25% currently

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Phineas J. Whoopee
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Re: Best interest bearing savings account?

Post by Phineas J. Whoopee » Sun May 12, 2019 6:45 pm

Assuming "best" means highest APY, see Deposit Accounts.

The occupant of the top slot changes frequently.

PJW

Explorer
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Re: Best interest bearing savings account?

Post by Explorer » Sun May 12, 2019 7:20 pm

welderwannabe wrote:
Sun May 12, 2019 5:27 pm
Explorer wrote:
Sun May 12, 2019 5:23 pm
lakpr wrote:
Sun May 12, 2019 5:13 pm
If this is funds you do not need in a short time, I'd suggest Vanguard Treasury Money Market fund (VUSXX), it's yield is state tax free.
lakpr - are you certain this fund distributions are state tax free? I am not sure... Vanguard website does not indicate that. I personally think you end up paying federal and state taxes.
Yes, lakpr is sure and so am I. VUSXX invests 100% into direct obligations of the Federal Govt. 100% state tax free in all 50 states.
Thank You.

gwrvmd
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Re: Best interest bearing savings account?

Post by gwrvmd » Sun May 12, 2019 7:49 pm

If you are eligible.......
I just renewed a 6mo CD at Pentagon Fed CU in my checking/savings account at 2.47%.......Gordon
Disciple of John Neff

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welderwannabe
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Re: Best interest bearing savings account?

Post by welderwannabe » Sun May 12, 2019 8:58 pm

gwrvmd wrote:
Sun May 12, 2019 7:49 pm
If you are eligible.......
I just renewed a 6mo CD at Pentagon Fed CU in my checking/savings account at 2.47%.......Gordon
6 Month TBill 2.44% state tax free...
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

WolfgangPauli
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Re: Best interest bearing savings account?

Post by WolfgangPauli » Sun May 12, 2019 9:15 pm

I went with Ally and with American Express Bank as both allow me to put the money in my trust. Many of the on line savings accounts / MM accounts do not allow that. Even the Goldman "Marcus" accounts would not allow trusts, Discover would not all the high interest MM in trust. Weird but true and I needed this money to be in my revocable trust so if you need it in your trust, make sure you ask.

FYI.. American Express was weird. I could not open the account in a trust but as soon as I opened it I was able to "retitle" it to my trust.
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Bronco Billy
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Re: Best interest bearing savings account?

Post by Bronco Billy » Sun May 12, 2019 9:24 pm

Discover Savings is only paying 2.10% but they have bonus money up to $200 if you open an account before 6/3/19. CD rates are 2.65 but no bonus money.

https://www.discover.com/online-banking ... lsrc=aw.ds

retiredflyboy
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Re: Best interest bearing savings account?

Post by retiredflyboy » Sun May 12, 2019 9:28 pm

I use Ally Bank and Vanguard Prime Money Market.
Facts are stubborn things. Everything works until it doesn’t.

Cyanide123
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Re: Best interest bearing savings account?

Post by Cyanide123 » Sun May 12, 2019 9:40 pm

I have A few savings accounts that all have similar interest.

Discover 2.15 percent if you use their link through aaii, American association of individual investors. You don't need an account with them to get the higher rate, otherwise it's 2.1 percent. Most of my banking has been with discover. A lot of free ATMs. Discover customer service also really is one of the best.

Ally next has 2.2 percent. They bought trade king so I automatically got grandfathered in to an ally invest account. Made a savings account to go with it.

Citi has 2.35 percent. Have 2 credit cards with them so heck why not a bank account too 😂 terribly slow at getting the account set up, but since it's the highest rate, I prefer them most of the time.

Amex 2.1 percent. Would have never made the account had I known that their credit card portal and Bank portal are not the same login on the same website. Have thought about closing this account but often get too lazy.

I believe cit Bank usually always has the highest rate. I never went with them, like I said, I already had login accounts at all the places above so adding an account wasn't a hassle. But it wasn't worth a new username an account with a completely new bank to go with CIT. But fairly certain they consistently have the highest rate

OSUperu
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Re: Best interest bearing savings account?

Post by OSUperu » Sun May 12, 2019 11:19 pm

I researched this early this year and I use Cit (Not citi) Bank and opened when it was at 2.45%. Now though I believe it's at 2.4%. Easy and simple and customer service was better than other's (Banesco, VIO, TAB...etc) at the time. $25k minimum balance -or- a simple monthly deposit of at least $100. So works for various types of means.

Shmom
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Re: Best interest bearing savings account?

Post by Shmom » Sun May 12, 2019 11:30 pm

Navy Federal credit union or nasa federal credit union have the best cd rates if you can lock up your funds for a few months or a year.

nolesrule
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Re: Best interest bearing savings account?

Post by nolesrule » Mon May 13, 2019 6:46 am

Vanguard Prime Money Market is only partially taxable in most states. In 2018 28.23% of income was from U.S. government obligations.

justaguy01
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Re: Best interest bearing savings account?

Post by justaguy01 » Mon May 13, 2019 7:42 am

I use Redneck Bank/All America Bank - 2.5% - great customer service and a good rate.

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Wiggums
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Re: Best interest bearing savings account?

Post by Wiggums » Mon May 13, 2019 8:10 am

retiredflyboy wrote:
Sun May 12, 2019 9:28 pm
I use Ally Bank and Vanguard Prime Money Market.
I do the same

GlennK
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Re: Best interest bearing savings account?

Post by GlennK » Mon May 13, 2019 8:49 am

I use LiveOak Bank, Marcus, and CIT. LiveOak seems to want to stay ahead on the interest and frequently bumps up. I also use the first two for CDs.

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Wiggums
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Re: Best interest bearing savings account?

Post by Wiggums » Mon May 13, 2019 9:05 am

Another good resource is
https://www.bankrate.com/

RobZ
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Re: Best interest bearing savings account?

Post by RobZ » Mon May 13, 2019 10:55 pm

Cyanide123 wrote:
Sun May 12, 2019 9:40 pm
Discover 2.15 percent if you use their link through aaii, American association of individual investors. You don't need an account with them to get the higher rate, otherwise it's 2.1 percent. Most of my banking has been with discover. A lot of free ATMs. Discover customer service also really is one of the best.
Any idea if existing savings account holders can get that .05% bump somehow?

Cyanide123
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Re: Best interest bearing savings account?

Post by Cyanide123 » Tue May 14, 2019 2:13 am

RobZ wrote:
Mon May 13, 2019 10:55 pm

Any idea if existing savings account holders can get that .05% bump somehow?
No idea. But maybe if you call customer service they might be able to help.

atdharris
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Re: Best interest bearing savings account?

Post by atdharris » Tue May 14, 2019 1:26 pm

I use Amex, but I wish they would update their savings interface and let you access it through the app. I'm just too lazy to transfer all the money to Ally. I do like Amex's customer service.

WolfgangPauli
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Re: Best interest bearing savings account?

Post by WolfgangPauli » Sat Jun 08, 2019 6:02 pm

RobZ wrote:
Mon May 13, 2019 10:55 pm
Cyanide123 wrote:
Sun May 12, 2019 9:40 pm
Discover 2.15 percent if you use their link through aaii, American association of individual investors. You don't need an account with them to get the higher rate, otherwise it's 2.1 percent. Most of my banking has been with discover. A lot of free ATMs. Discover customer service also really is one of the best.
Any idea if existing savings account holders can get that .05% bump somehow?
I had to leave Discover as they would not allow me to use the high interest rate account and title it in a trust. If I wanted it in a trust I had to "downgrade" to a different account which paid less interest..
Twitter: @JAXbogleheads | EM: JAXbogleheads@gmail.com

Smk18
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Re: Best interest bearing savings account?

Post by Smk18 » Sat Jun 08, 2019 7:35 pm

Wealthfront recently has savings account at 2.51% apy

chw
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Re: Best interest bearing savings account?

Post by chw » Wed Aug 28, 2019 8:22 pm

Been with Ally Bank for years. I like their platform, excellent customer service (24/7), easy setup with outside financial institutions, and generally good rates. Current MM rate slightly under others, but I suspect others will likely be lowering. Ally was a bit early on this rate cycle to lower rates, as usually if not the best rate, they are within 10-15 bps of the best rate. I would use Ally as your core bank, and if you have significant cash holdings, simply link Ally to the outside bank of your preference, and use that bank to park your cash.

jsaver
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Re: Best interest bearing savings account?

Post by jsaver » Wed Aug 28, 2019 9:08 pm

Ally takes forever (5 days) to fund a CD from outside ACH. Setup a checking/savings with them first so you can wire in funds same day and then you can setup the CDs instantly.

I lost a tenth of a percent on six CDs I just opened learning this lesson. The CD rates are set when they are funded, not when opened.

3-20Characters
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Re: Best interest bearing savings account?

Post by 3-20Characters » Thu Aug 29, 2019 6:23 am

I see the op started this May but it’s been revived for whatever reason.

If I had to park a large sum of cash, I would always go with VUSXX rather chasing a fraction of yield here or there—especially if exceeding fdic limit and having to split accounts to secure fdic insurance. When you consider state tax, you’ll probably come out close enough, ahead, or about the same with VUSXX.

I choose a bank based on good enough rates, their products and how well they execute on their website/IT, bill pay, transfers, etc. The IT is all over the place. I’ve signed up for bonus accounts at various banks and am shocked at how inept and useless many websites are. These banks then throw an app out there as well to make themselves seem hip but it’s often more useless than the website. Ally checks a lot of boxes for me and if their savings is 1.9% vs. 2.3, so be it. Rates change. I’m not moving accounts every time. And I have most of the cash in a couple no penalty CDs at 2.30% anyway. Good enough.

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oldcomputerguy
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Re: Best interest bearing savings account?

Post by oldcomputerguy » Thu Aug 29, 2019 8:21 am

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azurik
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Re: Best interest bearing savings account?

Post by azurik » Thu Aug 29, 2019 9:17 am

We were comparing CIT Bank savings and Ally savings :) Based on an interest bearing savings account like OP asked, CIT wins. With CDs and MMs, you can widen the discussion a little, but I'm not sure OP is looking for a lock-down period.

CIT Bank has an account called the Savings Builder offering 2.40% right now with no fees. I wrote a review about it with the pros and cons (not really any cons):

CIT Bank Review: 2.4% APY interest rates

mancich
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Re: Best interest bearing savings account?

Post by mancich » Sat Aug 31, 2019 1:23 pm

Phineas J. Whoopee wrote:
Sun May 12, 2019 6:45 pm
Assuming "best" means highest APY, see Deposit Accounts.

The occupant of the top slot changes frequently.

PJW
+1. And for this reason don’t overthink it. Pick one that offers a high rate and has generally good online reviews for customer service and move on.

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